Tesla plans to raise prices and backpedals on closing most stores

Elon Musk is backtracking from a jarring change in Tesla Inc.’s retail strategy, keeping many of the automaker’s stores open and raising the prices of its electric cars as a result.

Tesla will increase the cost of its vehicles by an average of about 3% after rethinking a plan, announced just 10 days earlier, to wind down all but a small number of its stores. In a blog post, the company said about half the locations it was planning to close will stay open.

The blog post doesn’t say why Tesla is backpedaling. Musk blindsided many sales personnel at the company with the plan to close the stores, and some investors and analysts feared the cost-cutting measures sent troubling signals about the state of the company’s sales and cash position.

“The seemingly spontaneous yet dramatically altering strategic decisions doesn’t lend a lot of confidence,” Joseph Spak, an analyst at RBC Capital Markets, wrote in a note Monday. “It makes it seem like Tesla is making decisions on the fly and reacting to very short-term factors.”

Read the full article at the Los Angeles Times.